The Federal Reserve Board threw a life preserver to keep American International Group Inc. from drowning last night, as the Fed agreed to have the U.S. government take a 79.9 percent stake in AIG in exchange for the Federal Reserve Bank of New York providing up to $85 billion in emergency financing.
The 11th-hour deal means AIG will continue to do "business as usual," rather than have to seek bankruptcy court protection, as had been cited as the worst-case scenario, a Fed official noted.
Meanwhile, New York Insurance Superintendent Eric Dinallo confirmed that Edward Liddy, the former chief executive officer for Allstate Corp., is under consideration to run AIG's day-to-day operations as its new CEO.
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